Fyson on ... the urgency for buyers to back green principles

A Royal Institution of Chartered Surveyors study has revealed a clear link between the environmental standards of a building and its market value.

This finding will encourage those who support a combination of energy efficiency and micro-generation for individual developments as a way out of the greenhouse gas crisis.

The Green Value project involved an examination of green buildings in Canada, the USA and the UK. Looking at commercial property, researchers found that green buildings are healthier to work in and give rise to hidden productivity gains. They also command higher rents and prices, attract tenants more quickly, keep them for longer and cost less to operate and maintain.

If green building can be profitable, there is a much better chance that the market place will help reduce greenhouse gas emissions and drive the necessary technological changes, especially in matters of building insulation and power generation. The findings may seem to support the Bush contention that left to itself, technological change rather than target-setting is the way forward. But the question of how fast the switch can be made remains.

Major commercial developers are absorbing costs to get things moving, but many are saying that regulation through building codes and even planning policy would level the playing field and set national standards.

Echoing the era when the rigidities of land valuation threatened to make vacant brownfield land uneconomic to redevelop, there has also been criticism of corporate accounting systems that rely on acquisition costs rather than market value. The cost approach is thought to be unable to adequately reflect the rising value of sustainability characteristics.

In the housing market, the government cannot rely on homeowners continuing to buy systems that do not stack up financially, even if they are supported by grants. The Renewable Power Association condemns as inadequate the arrangements proposed for next year when the current grant programmes end. Never mind that the prime minister's post-Kyoto technical development line is apparently at stake, the Treasury seems prepared to reduce annual overall grant support through the low carbon buildings programme.

It is vital for more purchaser support to be forthcoming so that unit production costs on equipment are cut. This is the only way that a free-standing competitive market can form. Otherwise, manufacturing firms will leave the renewable energy business, technological advantages in some areas will slip and global warming will accelerate. If this is not compelling enough, the Treasury might like to consider that as a result, government grants up to this point will have been largely wasted.

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